Starting a 501(c)(3) nonprofit in Massachusetts is easy, just follow these easy steps:
If you’ve been thinking about starting a 501(c)(3) nonprofit in Massachusetts, you have come to the right place. We have developed this comprehensive guide to help you not only start a nonprofit in Massachusetts but also make it successful.
Step 1: Name Your Massachusetts Nonprofit
The name you select for your nonprofit will establish its brand. It is the first thing most people will learn about your organization. It is important to pick a name that both aligns with your mission and follows the rules for naming in your state.
Massachusetts Nonprofit Naming Guidelines
- Unless your organization is a church or a religious institution, the name of your organization must indicate that it is a corporation
You can read the Commonwealth of Massachusetts Laws for the complete rules on naming a Massachusetts-based organization.
To learn more, read our How to Name a Nonprofit in Massachusetts guide.
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You may want to buy any URLs you are interested in, to make sure they are available when you are ready to finalize and create your website.
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Step 2: Appoint a Massachusetts Registered Agent
A nonprofit corporation in Massachusetts is required to have a registered agent with a Massachusetts address.
What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. Think of your registered agent as your business' point of contact with the state.
Incfile provides the first year of registered agent service free with nonprofit formation ($49 + State Fees)
To learn more, read our Massachusetts Registered Agent guide.
Step 3: Select Your Board Members and Officers
The directors of a nonprofit are responsible for overseeing the operations of the organization. The directors come together to form a board.
The officers of a nonprofit (such as the president or the secretary) are individuals with responsibilities, and the authority to execute based on their job descriptions.
Together, the officers and the board will come together to make up the organizational structure of your nonprofit.
The organization structure of your nonprofit in Massachusetts MUST include:
- At least 3 directors not related to each other
- A president (who must also be a director)
- A treasurer
- A clerk
To learn more, read our guide on How to Select Board Members for Your Massachusetts Nonprofit.
Step 4: Massachusetts Articles of Organization
To become a nonprofit corporation in Massachusetts you can file articles of organization by mail or online.
In order to qualify for 501(c)(3) status, the organization’s purpose must explicitly be limited to one or more of the following:
- Testing for public safety
- Fostering national/international amateur sports competition
- Preventing cruelty to animals/children
Submit the Articles of Organization form to the mailing address found below:
Secretary of State
Commonwealth of Massachusetts
One Ashburton Place, 17th Floor
Boston, MA 02108
To learn more, read our Massachusetts Articles of Organization guide.
Step 5: Draft Bylaws and Conflict of Interest Policy
There are two documents that will be central to the running of your nonprofit:
Bylaws: These are the rules that determine how your organization will be governed and run.
Conflict of Interest Policy: These are the rules set to ensure that decisions being made for the nonprofit are based on what is best for the organization, and not being motivated by what is best for individuals.
Step 6: Conduct an Organizational Meeting
An organizational meeting is the first official meeting of your nonprofit! Some of the things that are discussed in a typical organizational meeting:
- Taking attendance to show you have a quorum (minimum number needed)
- Appointing temporary officers, chairmen, secretaries, etc.
- Adoption of the bylaws
- Adoption of conflict of interest policy
Don’t forget to record “minutes” of the meeting and have it signed by all attending directors. Here are some corporate minutes templates to help you get the ball rolling.
Step 7: Get an EIN
An EIN or Employment Identification Number (also called a Federal Tax Identification Number or Federal Employment Identification Number), is used to uniquely identify a business entity. You can think of the EIN as a social security number for your nonprofit.
The EIN is required for your organization whether or not it will have any employees.
To learn more, read our guide on how to get your EIN.
Step 8: Applying for Exemption from State and Federal Taxes (501(c)(3) status)
Applying for Exemption from Federal Taxes:
A nonprofit may be eligible for 501(c)(3) status only if its purpose is limited to one or more of the following:
Charitable, Religious, Scientific, Educational, Literary, Fostering national/international amateur sports competition, Preventing cruelty to animals/children, Testing for public safety
Before a nonprofit can apply for 501(c)(3) status it must:
- Elect at least 3 directors not related to each other
- Register as a nonprofit with the state
- Adopt the bylaws and conflict of interest policy
- Have an EIN number
Once these four conditions have been met your nonprofit can apply for 501(c)(3) tax-exempt status by filing Form-1023 online.
If your application is approved, the IRS will send you a determination letter stating that your organization is exempt from federal taxes under section 501(c)(3).
To learn more, read our guide on How to File Form 1023-EZ.
Applying for Exemption from State Taxes:
For Corporate Income Tax Exemption: Once your organization has received 501(c)(3) status, send a copy of the IRS determination letter along with a copy of the articles of organization to the Corporate Exemptions Division of the Massachusetts Department of Revenue.
For Sale Income Tax Exemption: Send a copy of the IRS determination letter along with a letter of explanation. The department will review your case and let you know whether your organization qualifies for exemption.
Department of Revenue
Data Integration Bureau
P.O. Box 7022
Boston, MA 02204
Info. & Forms: (617) 887-6367
Filing Fee: $0
Once you have formed your Massachusetts nonprofit, we recommend you read our guide on How To Protect your Massachusetts Nonprofit and Keep It Compliant.
Step 9: Open a Nonprofit Bank Account
After you acquire an EIN and a federal tax exemption for your nonprofit, you can open a 501(c)(3) bank account to begin soliciting donations or paying vendors and employees of the organization.
Opening a bank account for your nonprofit is the first step towards creating a paper trail of all income and expenses to show the IRS that your nonprofit is legitimate, honest, and legal.
There are several rules and exceptions that differentiate a 501(c)(3) bank account from a traditional business account. To find the best bank for your organization's financial needs read our review of the best banks for small business.
Step 10: Get Insurance for your Nonprofit
A nonprofit has assets and can be the subject of legal action or suffer financial damages from accidents, just like a regular business.
We recommend Commercial Insurance to protect your organization from lawsuits and damages.